# Urban County Council Meeting - State of the Merged Government Address - January 24, 2012 > Auto-transcribed civic record · January 24, 2012 - **Permalink**: https://meetings.lexingtonky.news/meeting/2356 - **Source video**: https://lfucg.granicus.com/player/clip/2356?view_id=14&redirect=true - **Date**: 2012-01-24 - **Last revised**: July 17, 2026 - **Length**: 5,231 words > ⚠️ **Auto-generated content.** Audio from the official Granicus video was auto-transcribed with OpenAI's open-source Whisper large-v3-turbo model, run locally by The Lexington Times. Structured facts were extracted with GPT-4o; the narrative summary was written by Anthropic Claude. Verbatim wording may contain errors. See [methodology](https://meetings.lexingtonky.news/about/methodology) or [report a correction](mailto:editor@lexingtonky.news). --- ## Meeting Overview The Lexington-Fayette Urban County Government held a meeting on January 24, 2012, at 11:30 AM at the Lexington Center Bluegrass Ballroom. Mayor Jim Gray presided over the session. The meeting featured one agenda item: a State of the Merged Government Address, which was presented for informational purposes. No motions were voted on during the meeting, and no public comments were heard. ## Attendance **Present:** Gorton, Henson, Kay, Lane, Lawless, Martin, McChord, Myers, Stinnett, Beard, Blues, Ellinger, Farmer, Ford **Absent:** Crosbie **Late:** None ## State of the Merged Government Address Mayor Jim Gray delivered the State of the Merged Government Address [timestamp: 00:00], presenting an overview of the merged government's priorities and accomplishments. **Key Themes** The address focused on three primary themes: - Job creation - Government efficiency - Building a Great American City **Areas of Progress** Mayor Gray highlighted accomplishments in several key areas: - Fiscal responsibility - Public safety reforms - Rupp Arena redevelopment task force initiatives **Approach** The address emphasized collaboration among government, business, and community stakeholders as essential to achieving the outlined goals. **Outcome** This was an informational presentation with no formal action required. --- ## Full transcript For our featured speaker, ladies and gentlemen, please join me in welcoming Mayor Jim Gracie who delivers the 2012 State of the Merge Government Address. I thought Darrell might have been leaving something important up here. Good afternoon, everybody. And thanks to all of you for being here. Vice Mayor Gordon, our council members, members of the Lexington Forum, President Darrell Terry, the organizer extraordinary of this event, Kim Swayze. Kim, where are you? Hold your hand up. Where are you? Where is she? Thank you. Oh, right here. Sam White. You know, Sam had this platform, y'all, as a bit of a leftover from another event this week. The city is not paying for it. Okay, relax. I really want to thank, too, and recognize and congratulate Alan Stein. Of course, can't mention Alan without mentioning our State Senator, Kathy Stein, and recognizing all of the hard work that both of you have done on behalf of our community. Thank you all. Thank you. I also want to recognize all of the engaged citizens in this room, thanks to all of you. You know, I often say that even on a bad day, this is a great job, and I am so thankful for it. I also say that we shouldn't take ourselves seriously even though we take our jobs seriously. Well, Bill Howell, who some of you know in this room, Bill reminded me of that on Saturday. Bill's at the PNC table over here. He said to me on Saturday, he said, Hey, Jim, I'm coming to your talk on Tuesday. And enthusiastically, I said, Well, thanks a lot, Bill. I really appreciate it. Yeah, he said without missing a beat, I never pass up a free lunch. Okay, and I'm sure some of the rest of you, just a few of you are here as well on the same reasons, but I thank you for being here. It was Michael Nutter, who's the mayor of Philadelphia. He's kind of a no-nonsense mayor. He said, you know, if you have a deep need to be loved, don't run for mayor. work in a pet shop. Okay. Now, I suspect that that ought to be don't run for mayor or council. Right, council members? You all understand it. We really got a great group. I wish I could update you on all of their initiatives, all of their projects in this speech as well. That would take a lot longer than the hour we've got. So I won't point out all of their individual accomplishments, but so many of the initiatives I'll be talking about today are guided by council leadership. So please join me in thanking every one of them. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. You know, I confess, I love to start a little talk like this with a tribute to our city's history. Alan said it best. Lexington is a great city. Settled 237 years ago in 1775. And just a couple of years after that, Rupp Arena was built. So now, Dr. Capilouto, thank you so much for being here today. We will come back to Rupp in a few minutes, but you have done such an extraordinary job of declaring the purpose and the mission and the priorities of our university, and we all appreciate you for that. Thank you, sir. Thanks also to Bluegrass Community and Technical College President Augusta Julian for being here today. BCTC is building a new downtown campus on a site that itself has a lot of history. And it's real close to Transylvania, whose presence and founding in 1780 is a touchstone for us every day. Thank you, President Owen Williams, for joining us today. You know, valuing and understanding what is special and unique and authentic about our history helps provide us with a roadmap for today and tomorrow. I'll bet that many of you, in fact, would agree that the journey is the safest when the roadmap is the clearest. So that's why themes we set out with more than a year ago in little events called campaigns and elections, those are the same themes that are guiding us today. And they're the themes we'll use today to look back on 2011 and look ahead to 2012 and beyond. So what are those themes? Here they are. Create jobs. Run government efficiently. and build a great American city. These themes hang on banners in the mayor's office, first floor, city hall. These themes, they coexist. We really can't accomplish one without the others. We need all three to grow and to compete. To create good jobs, we must build a great American city. the kind of city that offers the quality of life and the kind of place that will attract creative and talented and smart people, the kinds of people who can create good companies that offer good jobs. Building a great American city requires an efficient government as well, not an option. Benjamin Franklin would say it best, spend every nickel you need, but not a penny more. You know, all businesses recognize there are times when we must save money to make money, make cuts, reduce our cost basis in Toyota language. And all good businesses recognize there are times when we have to spend money to make money, to invest in our brand for a better tomorrow, a more promising future. So they go together, create jobs, run government efficiently, build a great American city. Now at the top of the banners, where it really belongs, create jobs. We all know that government doesn't create jobs. But government can create the conditions and the environment, the spirit for jobs. A couple of weeks ago, Louisville Mayor Greg Fisher and I, along with Governor Beshear, we went to the Detroit Automotive Show. Now, I'd been there before in my previous life because the Detroit Automotive Show is really the best in the world. It was a must for me in my other job, and it's a must. I view it in my role as mayor today because mayors should view their cities through an entrepreneurial lens, through a lens that accommodates change and invention and imagination. Mayor Fisher and I knew the auto show was important because of Toyota in Georgetown. By the way, you all know, just got a note, you heard about it yesterday, the 25 millionth car was celebrated by Toyota in North America. Congratulations. Congratulations to Will James and Kim Menke and Swayze and all of the team who are here with us today. We also knew that the auto show was important because of Ford in Louisville. Because Kentucky is the fourth largest manufacturer or supplier of auto parts in the nation, 440 companies employ more than 68,000 Kentuckians. and because more recently of the Argonne Kentucky National Lab at Spindletop, soon to be online. And why is that important? This lab will perform automotive battery research and development. Tapping into the universities of Kentucky and Louisville, brainpower that positions Kentucky as a leader in the next generation of electric cars and all we heard about in Detroit was that it's all about the recovery of the American auto industry. And it is on a real fast pace. It's all about electric, hybrid, and plug-in cars. It's all about lighter vehicles. It's all about alternative fuels. And we are positioned well. The entrepreneurial focus on creating jobs also included this year creating the BEAM project. That's the acronym for Bluegrass Economic Advancement Movement. It's an economic development partnership that Mayor Fisher and I put together really to develop a regional business plan focused on advanced manufacturing, which is the industry sector where almost 100,000 jobs are today held between our two cities and regions. We're one of just four regions in the nation selected to work with the Brookings Institute. the best brand in the world for invention, imagination, to develop a plan to build on existing strengths and work together to achieve significant job growth in advanced manufacturing and other key industry sectors. Jim Host is at the helm of the project. The importance of the BEAM project will continue to grow because it's focused on creating a world-class advanced manufacturing region right here in the bluegrass, creating in our super region with Louisville a gravitational pull for investment and jobs. In addition to BEAM, Lexington and Louisville are working together to create a working group to explore issues that are common to our state's fastest growing metropolitan areas, Louisville, Lexington, and northern Kentucky. In the last census, Lexington was recognized as the second fastest growing city region in the state. 15% growth, second only to Boone County in northern Kentucky. So this work of creating jobs represents government and business working together. Looking back over the past year, I've often heard folks say that Lexington is blessed. We've weathered the recession better than most. And yes, we are blessed. But then I'm reminded that at the height of the recession in 2009, we could fill Rupp Arena with the unemployed in our metro area, 25,000. That represented almost 10% of the region's 265,000 workforce. It's been tough. We've recovered 10,000 of those jobs. But that's because some people have stopped looking and given up. We still need jobs. We still need jobs. UK's economist Ken Trotsky points out that the jobs we have recovered have not been as good as the jobs we had. But even so, when you look around this room, it is a great reminder that our business community is full of creative, exciting entrepreneurs, and they are doing all kinds of great work. A few recent examples of this creativity, Holly Wiedemann at AU Associates, who will announce completion of Parkside in a news conference tomorrow. What's Parkside? Parkside is a creative affordable housing development. Once the cross keys YWCA, right, Peggy Henson? Talk about reinvention. Location, where is it? Just off Alexandria Drive. And distressed properties. Distressed properties mean distressed neighborhoods. It's a big deal that at Sonnet Cove Apartments off Lakeside, Bill Farmer and Pennington Place Apartments off Richmond Road, Casey Crosby at New Circle. It's a big deal that they are being restored. Here today with us, too, are creative social entrepreneurs. Aaron Mosley and his nephew, Logan Averitt, who live every moment to serve and to develop and invest in the youth of our city, just as we work to address the needs of our senior citizens through a vice mayor's council task force. Herald leaders Tom Eblen and Wynn already mentioned it. He writes with great entrepreneurial insight about our opportunities and our challenges. Tom pointed out to me just last week that as the university works to solve its residency issues, The university helps Lexington solve its problems in the neighborhoods and surrounding campus. And Tom points out that it is never UK or Lexington. It is always about UK and Lexington. Also with us here today is Drew Curtis. Drew's become an evangelist for Lexington's technology culture and about recruiting venture capital. Drew is a guy that will tell you that Lexington ought to be, should be, can be the next Austin or Boulder with a robust venture capital ecosystem that supports the invention and the imagination that we are creating through the research initiatives at the university. Then, too, there's Ben and Rebecca Self. They are turning the old Rainbow Bread Factory on 6th Street into a grand place for innovation. These entrepreneurs are joining our more established businesses that have decided to locate their corporate headquarters here through the great work of our friends at Commerce Lexington, And that includes Tempur-Pedic, Florida Tile, and AMW Brands. Okay, we've talked about jobs. Now next on our banner, running government efficiently. Now some of you have heard me say that in this job you've got to love three things. You've got to love people, you've got to love your city, and you've got to love problems, because we've got plenty of them, but plenty of opportunities as well. In our first budget, a businessman's budget, we reflected our efforts to address longstanding problems. We staked a claim on solid operational and financial management and efficiency, ensuring that government live within its means. We overcame a $9 million deficit inherited in the 2011 fiscal year budget, and we're now overcoming a $25 million deficit in the 2012 budget. Our commissioners and senior staff are taking a two-week unpaid furlough. I'm investing half of my salary in quality of life improvements and economic development. The 2012 budget included no new taxes. The budget made some tough changes in employee health insurance. Regrettably, the city had been subsidizing the cost of employee health care by an average of $10 million a year for three years. And the price tag has been growing each year. In this year's budget, had we not taken steps to curb our costs, the subsidy might have risen to $16 million. So in addition to asking employees to contribute, we invested in a health clinic and soon a pharmacy. Initiatives we predict will save money for both our city and employees. So I want to thank our employees who have sacrificed as we have moved through this tough transition with health insurance, especially our general government employees who have worked with us even though the last raise was 1% in 2009. When we come out of this ditch, and we will, these folks deserve the first hand of thanks appreciation, a hand of thanks reaching out to lift them up. I'm talking about the employees who keep the potholes patched and the garbage collected and the traffic moving. Folks like Keith Martin, who patches the potholes, runs the crew, keeps the roads free of snow in streets and roads department. Keith recognized that our asphalt wasn't working as well as it could in the patching mix. And working with his boss, Sam Williams, he found a mixture that works better. Government employees make these kinds of improvements every day, and they deserve recognition. Thank you. They're the backbone of our government. Pam Brandenburg represents them through CSEA. Pam and Keith and Sam, thanks for being here today. Stay with me now. We're still talking about the pursuit of efficiency, which is about striving for excellence. We are also addressing long-term operational issues outside the budget, problems that have accumulated over the years, resulting in lawsuits, compromised morale, safety concerns, and yes, inefficiencies. With new management has come significant improvement at our jail. Improved personnel and safety protocols, better medical service for inmates. Yes, there's plenty of work to do, but in five short months, Ray Sabatini has accomplished a lot. Ray couldn't be with us today, but he has working with him, Glenn Brown, in the mayor's office who, like Ray, is a former director of our jail. Because of a close collaboration between the Board of Health and Jeff Reed on my staff, we have new leadership at the Health Department. Dr. Rice Leach has cleared a path for the creation of a new health clinic for low-income citizens. Thank you, Rice. E911 is back under the supervision of police and fire, addressing many concerns. And I want to recognize Interim Fire Chief Keith Jackson, who in his first year in this role has significantly reduced overtime costs from as much as $3.2 million in 2010 to $30,000 this year. improved morale and helped... ...improving morale and helping build our government-wide business planning systems as well. Keith, you know what real leadership is about. It's about overcoming adversity. Thank you. It's no secret that with the adoption of collective bargaining for fire and police in 2004 and corrections in 2006, our budget landscape changed a lot. During the past five years, our police and fire employees have fared very well in collective bargaining processes. With the financial situation we face today, it's worthwhile to know and remember that almost 90% of the increased revenues our city took in between 2002 and 2011 $9 out of every $10 went to public safety. Now, in absolute dollars, that is an increase of $63.5 million out of a total revenue increase of $71 million. That brings our total public safety budget to $155 million this year alone, out of a total budget of $275, $280 million. Now today, with the revenue shortfalls and tighter budgets, we've had to ask our public safety employees to make sacrifices. To meaningfully address our budget, public safety needed to be examined carefully, and the collective bargaining process needed to become a meaningful tool in restoring balance to our finances. Clearly, we needed some help. We needed advice from a professional contract negotiator, and this year we engaged one. I'm pleased to report that our firefighters stepped up to help the city and sacrificed, and so have our corrections employees in an agreement just approved last night. Keith, thank you guys very much. Thank you. Police negotiations continue. We budgeted $5.6 million in savings from union contracts in this year's budget. Now that basically meant containing increases. We must understand that when it comes to cutting the city's budget further, it's important for us to recognize that we have very few options left outside of layoffs. Although in our first budget we made progress in our drive toward financial responsibility and we've made some progress in addressing longstanding problems, there are still challenges out there. Our pension and its mounting unfunded liability is a big problem. It's one that, of course, we share with cities and states across the country. But in Kentucky, Lexington is the only city that has its own pension system by law. All other active fire and police fall under the state's pension system. Now, as the law exists today, the legislature makes the rules on our pension system. But Lexington's taxpayers and citizens have to pay for. So here's what that leads to. About 8% of state police are given disability pensions. In Lexington, 38% of our police and fire officers retire on disability pensions. In 2008, the legislature began addressing state pension problems, but left Lexington's system alone. We hope the legislature won't take the same course again. We just have to ask, please don't bypass Lexington's growing crisis. We ask Lexington's legislative delegation to please step up and help us fix our system. The city is not legally empowered to address this problem, even though it impacts every Lexington citizen. We've appointed a task force to work on finding reasonable solutions to submit to the General Assembly. Thanks to Tim Kelly, who is leading this group and is here today. We know the problem wasn't created in a day or a year, and it'll take time to correct, but we got to stay focused on it. And since we're talking about Frankfurt, and Alan's already done it, but I want to welcome our new state senator, Dorsey Ridley. Dorsey's with us here today. Dorsey, Lexington is just like your hometown of Henderson. We've got lots of issues. We're going to need your help. Let's give him another warm welcome. Thank you so much. And thank you again, Senator Stein, for inviting him. So we've talked about jobs. We know creating jobs is part of building a great American city. We know that government efficiency is part of building a great American city. What else is part of building a great American city? To attract talented people to Lexington, the kind of people who will create good jobs and businesses and raise the economic water table, building a great American city includes making smart, wise investments in our brand. You know, when you're green, you grow. When you're ripe, you rot. When we fail to continuously, vigorously, and rigorously invest in the brand, that brand will decline. No market is forever. We know that talented people today can choose where they want to live. If we want them to choose Lexington, investing in our urban core, in our brand, is essential. How? Through inspired urban design that creates a sense of place. Thanks to Michael Speaks, Dean of the College of Design at the University of Kentucky. Thanks, Michael, for speaking out on this issue in Sunday's paper. This year we saw Jeanne Gang, who won a MacArthur Genius Grant in architecture. we saw Jeanne Gang create a sense of place with her design for CenterPoint. We are seeing the importance of design today with the good work of the Design Excellence Task Force. Council Member Blues tells me that a report is coming out later today in a council meeting. Mayor Fisher and I saw it at the automotive show two weeks ago, where it was all about design as well as great technology and engineering. What was the message there? The U.S. auto industry's recovery is related to great technology and great design, design that exceeds the expectation of every customer. You know what? That also was the legacy, of course, of Steve Jobs. And it applies to cities as well. In the past year, a lot of good planning has occurred. Some of the bigger plans have involved investing in our urban core, our downtown, lifting up what is unique and elevating our brand. A year ago when I stood with you here, I introduced the idea of a task force to examine Rupp Arena and the creation of an arts and entertainment district that would boost business. Since then, 47 citizen volunteers have worked to create a plan for 46 acres in and around right here, Lexington Center, at the core of our downtown. The city owns these 46 acres, a unique asset. The task force has been developing a plan to activate these 46 acres, which are now mostly covered by parking lots. Task force chairman Brent Rice is here with us today as our committee chairs, Will James and Luther Deaton, and several members of the task force. And I want to thank each and every one for your hard and spirited work. Thank you. Now, Will James says it best, present out at Toyota. This is all about economic development, Jim, he said. A project to grow jobs by encouraging investments in both the Lexington brand and the top-notch University of Kentucky basketball brand. All of the work of the task force has been privately funded. Brent Rice, you've done a great job with fundraising and leadership. Now the district is, the district is, of course, today about much more than Rupp Arena. But most of the public discussion has been about Rupp Arena. Can't help it. It's to be expected. The Rupp brand extends far beyond our city limits, representing our state and our citizens to the nation and even beyond our national borders. Yes, U.K. basketball is one of the top sports brands in the world. An early decision point for the task force was whether Rupp should be reinvented, renovated, or replaced entirely. To help them, the task force brought together a dream team of some of the best architects, engineers, and sports arena construction management firms in the country, in fact, in the world. The unanimous choice of the group's planning and design committee, chaired by former Mayor Pam Miller, was to reinvent. Importantly, it's about half the cost of building a new arena. Efficiency. Importantly, it will build upon the authentic history and energy that exists today in Rupp Arena. Now, let's listen for just a minute to the voice of the coach himself, Coach Adolph Rupp, from back about 40 years ago as we take a look at the great bones of Rupp Arena as reimagined and reinvented. Just as he had a Freeport, Coach Rupp arrived in Lexington with a new style of play. And although the Wildcats had been successful under Coach Johnny Maurer, Cary Spicer, the team captain, was delighted with Rupp's new game plan. I called Cary in and talked to him. I told him what my plans were. Cary, of course, was very much impressed right away with what I said and said that they were glad that they would have the opportunity to fast break and get an opportunity to score and have an opportunity to shoot and not be restrained the way they were before. And when the rest of the team joined the conversation, they not only met a new coach, but a master psychologist as well. I called them together and I told them that we want to play an aggressive style, a basketball. I said I want to go back to the pioneer spirit of our forefathers. I said the pilgrims who landed on Plymouth Rock didn't look for security. I said what security did Daniel Boone ask for when he penetrated the wilderness and what security did our pioneer mothers and fathers have when they carved their homes out of the western plains. all they wanted was an opportunity and I said that's all I can offer you folks and I said now boys let's not look for security let's look for opportunity and I said if we'll keep that philosophy in mind the rest of our lives in whatever we do you'll all become great someday I want a perfect harmony I want a perfect execution of play and I want perfect attention to details. And I said, if I can get that, I said we'll have a great team. There's only one fellow in this room today that I know who could say it better than that, and that's Coach Joe B. Hall. Coach Hall? Joe B. Thank you, sir. Woo! Coach Hall was a member of the task force, and he said often about the same thing. Jim, he'd say, we need to make whatever's done there unique. Don't just copy something else, another arena. So the design, the vision of the district's master planner, Gary Bates, it frees Rupp. It peels away the industrial outer skin of the arena and replaces it with glass to encourage the energy inside to flow into an outdoor plaza, where contemporary modern electronic video screens will engage fans outside and audiences. I have to confess, the best endorsement I think that I've heard about this plan came from a fellow in Louisville who knows a little bit about branding and marketing, Bill Samuels Jr., Maker's Mark. Many of you know him. He built the Maker's Mark brand into an international powerhouse. Bill called me after he saw the story in the paper with the images, and he said, Jim, I just want to tell you I saw that picture of Rupp and the district and I almost fell out of my chair. That's just the best thing I've seen come out of Lexington in my lifetime. So let's take a look now at an inside image. This is a conceptual image the task force got just last week. And here's a few details about some of the things you see here. It represents 800 to 1,000 new lower arena seats. It includes what's called in the industry precision demolition and reconstruction of the upper arena, with all chair back seats, a new eight-sided center hung scoreboard, new wireless technology, premium seating, larger concourses, more restrooms, shorter lines, a new entry lobby around the Triangle Park. All in all, we are talking about a new arena inside and outside the box next door. I want to thank again Governor Beshear, who is making through his budget this project a priority. It gives us a lot of momentum. It highlights the importance to the entire state. In fact, on the Jack Paddy show last week, after the budget address, Jack asked the governor, he said, what about the Rupp Arena? He said, Jack, have you seen the pictures of that? It's beautiful. Now, on January 31st, the task force will make its final report to the public. The project is right on schedule. We're on step three of about ten, right where Brent Rice, the chair, said we would be at this time. Now, today, here's what we look at when we look at the district. This is an aerial. You see Cox Street. Now, here is the district. with the reinvention the new design proposes. So this district includes many possibilities. New arts facilities, convention space, commercial and residential development, and new downtown educational and business venues. The task force has already been working with Fayette County Schools Superintendent Tom Shelton and with the school's Chief Operating Officer, Mary Wright, and they are both here with us today along with colleagues and students. They are, in fact, joined by SCAPA Principal Beth Randolph and two of her students and by the Learning Center Ron Chen's principal. And just last night, the Fayette County Board of Education voted unanimously to explore the possibility of opening a downtown arts school close to arts facilities that would reflect and amplify the diversity of our city. Thank you. Thank you. So, folks, it's not all about RUP. It is about the entire district and the way it relates to our downtown. In other cities, Columbus, for example, districts like this have become proven winners when it comes to job creation, to private investment and capital investment, to economic development. Columbus reports $20 million in increased revenue through the district and their improving downtown. So great design has become an economic driver. Adjusting the way we think about our city is a good thing. When we use words like brand and history and economic development, think preservation. Think our extraordinary bluegrass, our world-class rural landscape. landscape. Then imagine that preservation and growth go hand in hand. By creating an active, engaged, vibrant urban core and downtown, we leverage the investment and intellectual horsepower of the educational system we invest in. And at the end of the day, we have a better chance of preserving what makes us special, this bluegrass. Strong economies do just that. they raise the economic water table they create jobs and opportunities they preserve what's unique and special we are entering a new era according to the census figures Lexington has just passed the 300,000 mark and that's a very big deal we are a city but thankfully we are not like any other city only cities that are true to themselves, that are authentic, become great American cities, places that have an extraordinary gravitational pull on people, innovation, investment, and engagement. So let me dial back in closing to 1832, 180 years ago. That's when Henry Clay made plans to raise a million dollars to build the first railroad connecting Lexington to Louisville. That was an investment then, equivalent to almost a billion dollars today. It was all about economic growth. It was all about giving the next generation a leg up in life. Clay dreamed of Lexington not as a hamlet or a village or a town, but as a great American city. That's what Adolph Rupp was talking about too. And that's what we are all talking about today. This is Lexington's moment. This is our time. Thank you all for joining us today and thanks to the Lexington Forum for having us. Thank you. Thank you.